2020 JAMB COMMERCE PAST QUESTIONS AND ANSWERS

The correct answer is Commerce, which encompasses trade and its supporting services like transport and warehousing. Trade is the exchange of goods, while aids to trade facilitate this process. Options like “Market” are too limited to represent the wide scope of commerce.

The correct answer is Liability to banks. Customer deposits are obligations the bank must pay back on demand, making them liabilities. “Asset to banks” is incorrect because deposits are not owned by the bank.

The correct answer is Companies Allied Matters Act. CAMA governs company regulations in Nigeria. “Companies and Allied Matter Act” is incorrect as the name has an extra “s” on “Matters.”

The correct answer is All of the above, as wholesalers serve as intermediaries, provide credit to retailers, and offer warehousing facilities. Other options only cover partial functions, not the complete range of wholesaler services.

The correct answer is Ownership. In hire purchase, ownership transfers after final payment, unlike in credit sales where it transfers immediately. “Position” and “Time” do not accurately describe the main distinction.

The correct answer is Agent’s commission, referring to a percentage earned by agents for arranging credit. Other options misinterpret this term, as it specifically pertains to agents’ earnings.

The correct answer is Producer-wholesaler-retailer-consumer, the most efficient chain for consumer goods distribution. Direct channels like Producer-consumer are often impractical for wide consumer outreach.

The correct answer is Indebtedness to the issuer, showing that the recipient owes the issuer. “Bearer” or “Inheritor” are incorrect, as credit notes pertain to transactions between buyer and seller.

The correct answer is Low patronage, where companies may lower prices to attract investors. “High reserve” is incorrect, as it may indicate financial strength rather than need for discounts.

The correct answer is Article of Association, detailing internal governance of a company. The Memorandum outlines external relations, not internal structures.

The correct answer is Premium, a regular amount paid to keep an insurance policy active. “Indemnity” refers to compensation after a loss, not regular payment.

The correct answer is Horizontal integration, a merger between firms in the same industry level. Vertical integration would involve companies at different production stages.

The correct answer is 15 times, calculated by dividing total purchases by average stock. “8 times” and “10 times” are incorrect calculations of turnover rate.

The correct answer is Fixed dividend, a predetermined payout to preference shareholders. “Interest” is not applicable as shareholders receive dividends, not interest.

The correct answer is Warehouse. Unlike banking or transportation, warehouses only store goods rather than aiding in the trading process directly.

The correct answer is No interest on capital, as partners earn based on profit-sharing agreements unless stated otherwise. Other percentages like 5% and 10% are irrelevant without specific agreements.

The correct answer is Shareholder’s capital, as sole proprietors do not issue shares. “Private loan” and “Bank loan” are valid financing methods for individuals.

The correct answer is Seven, as specified by CAMA, establishing the minimum size for public companies. Other numbers do not meet CAMA’s requirement.

The correct answer is Limited liability, as the group is a corporation with limited owner liability. “Sole proprietor” and “Unlimited liability” are incorrect for such large corporate structures.

The correct answer is Excise duty, a tax applied to goods produced within the country. “Tariff” and “Import duty” apply to imported goods, not locally produced ones.

The correct answer is Social responsibility. Companies sometimes offer scholarships as part of their social responsibility to support education. “Environmental responsibility” is not related to educational aid.

The correct answer is Transfer of ownership of businesses from the public to private sector. “Making business profit-oriented” doesn’t capture privatization’s focus on ownership change.

The correct answer is Price, as consideration refers to the value exchanged between contracting parties. “Agreement” is part of a contract, but not the value exchanged.

The correct answer is Marine insurance, which covers losses occurring during maritime transport. Other types like motor insurance do not pertain to sea travel.

The correct answer is Market, Money, Man, and Machine, essential components for effective production and business management. “Materials” instead of “Man” is incorrect.

The correct answer is Fully subscribed, indicating all available shares are taken up by investors. “Fully paid” refers to payment status, not share subscription.

The correct answer is Organogram, a visual chart showing hierarchical relationships. “Bar chart” and “Organizational chart” are incorrect for this specific purpose.

The correct answer is Region, as domestic trade occurs within one country and foreign trade crosses borders. “Price” and “Quality of product” are irrelevant to this distinction.

The correct answer is Nature of the product, as different products require specific transport methods (e.g., perishable goods need refrigerated vehicles). “Price” does not affect transportation choice directly.

The correct answer is Random Access Memory (RAM), which temporarily holds data for processing. “Read-only memory (ROM)” and “Central processing unit” serve different functions.

The correct answer is Co-operative banks, as microfinance banks serve small-scale businesses and individuals, similar to cooperatives. “Industrial banks” cater to large businesses, which is inaccurate for microfinance.

The correct answer is Bank of Industry and Bank of Agriculture, which are Nigerian development banks supporting industry and agriculture.

The correct answer is Exchange rate, a vital aspect of international trade. “Export quotas” is a trade restriction, not a pricing term.

The correct answer is Demand and supply, as these factors influence currency values in the exchange market. Other options do not directly determine currency rates.

The correct answer is Debenture holders are creditors while preference shareholders are owners. Debentures are loans, whereas shareholders own equity.

The correct answer is Fixed dividends, as preference shareholders receive set dividends, unlike debenture holders who earn interest on their loans.

The correct answer is ₦250, based on the insured amount proportion. “₦500” or “₦200” are incorrect as compensation is calculated based on insured value.

The correct answer is Import duty, a tax on imports, not a trade document. Essential documents like “Bill of Lading” facilitate international shipping.

The correct answer is Political intervention, which can disrupt agency operations. Other factors like “Cultural barriers” might pose challenges but are less impactful.

The correct answer is Primary production, involving raw material extraction like mining and agriculture. “Secondary production” involves manufacturing, which is a subsequent process.